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Bio-Rad Laboratories, Inc. (BIO) Reports Second-Quarter 2014 Financial Results



8/7/2014 10:12:26 AM

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HERCULES, CA--(Marketwired - August 05, 2014) - Bio-Rad Laboratories, Inc. (NYSE: BIO) and (NYSE: BIO.B), a global provider of life science research and clinical diagnostic products, today announced financial results for the second quarter ended June 30, 2014.

Second-quarter reported revenues were $536.8 million, up 2.2 percent compared to $525.3 million reported for the second quarter of 2013. On a currency-neutral basis, quarterly revenues increased 1.1 percent compared to the same period last year. Second-quarter gross margin was 55.4 percent compared to 57.1 percent reported during the same quarter in 2013. The net decline in gross margin is largely attributable to product mix and continued pricing pressures in the diagnostics market.

Net income for the second quarter of 2014 was $31.6 million, or $1.09 per share on a fully diluted basis, compared to $34.6 million, or $1.20 per share, respectively, during the same period last year.

On a reported basis, year-to-date revenues were up 2.1 percent to $1.05 billion compared to $1.02 billion for the first two quarters of 2013. On a currency-neutral basis, revenues grew 2.0 percent.

Year-to-date net income for 2014 was $38.3 million, or $1.32 per share on a fully diluted basis, compared to $54.8 million, or $1.90 per share, respectively, during the same period in 2013.

The lower net income for the first half of 2014 when compared to the same period last year, was primarily driven by lower gross margins, higher SG&A that includes a $9.8 million accrual in the first quarter resulting from the Company's efforts to resolve the previously disclosed investigation of the Company in connection with the United States Foreign Corrupt Practices Act, and an increase in R&D expense as a result of our current quarter acquisition of GnuBIO, Inc. In contrast to the first half of 2013, the tax rate for the first six months of 2014 is higher as it did not include a benefit of the U.S. research & development tax credit. Cash flow was strong for the six months ended June 30, 2014 compared to the same period last year, as cash provided by operations was $149.8 million in 2014 versus $43.8 million last year. This strength was largely due to an increase in customer collections, as well as a decrease in interest paid in the first half of 2014 related to the redemption of Senior Subordinated Notes in 2013.

"Although we continued to see softness in some markets during the second quarter, we are encouraged by an increase in sales in many parts of the world," said Norman Schwartz, Bio-Rad Chief Executive Officer. "As the year continues, we will remain focused on new products and systems that will help us grow our business."

Life Science
Life Science segment net sales for the second quarter of 2014 were $170.3 million, essentially flat, when compared to the same period last year. On a currency-neutral basis, Life Science segment net sales decreased by 1.1 percent compared to the same quarter last year. Although sales increased in both Europe and the U.S. during the second quarter of 2014, the timing of orders in Asia, most notably in China, had a negative impact on results compared to the second quarter of 2013. This performance was somewhat offset by growth of the Company's Droplet Digital™ PCR, process chromatography, and cell biology products.

Clinical Diagnostics
Reported net sales for the Clinical Diagnostics segment in the second quarter of 2014 were $362.9 million, up 3.2 percent compared to the same quarter last year. On a currency-neutral basis, net sales increased 2.1 percent. While sales increased in China and emerging markets in the second quarter of 2014, this was partially offset by a decline in Europe. During the quarter, Bio-Rad announced the launch of two new kits for its fully-automated BioPlex® 2200 system: the BioPlex® HIVAg-Ab kit, a first-in-class 5th generation HIV test, and the BioPlex® Vitamin D kit. Both kits were launched in markets outside the U.S.

Management will discuss these results in a conference call at 2 PM Pacific Time (5 PM Eastern Time) August 5, 2014. Interested parties may access the call by dialing 866-318-8617 (in the U.S.) or 617-399-5136 (international), passcode: 33283045.

A live webcast of the conference call may be accessed in the Investor Relations section of www.bio-rad.com. A replay of the call will be available at 888-286-8010 (in the U.S.) or 617-801-6888 (international), passcode: 48074970, for seven days following the call. The webcast of the call will be archived on the Bio-Rad site and may be accessed in the Investor Relations section.

About Bio-Rad
Bio-Rad Laboratories, Inc. (NYSE: BIO) and (NYSE: BIO.B) develops, manufactures, and markets a broad range of innovative products and solutions for the life science research and clinical diagnostic markets. The company is renowned for its commitment to quality and customer service among university and research institutions, hospitals, public health and commercial laboratories, as well as the biotechnology, pharmaceutical, and food safety industries. Founded in 1952, Bio-Rad is based in Hercules, California, and serves more than 100,000 research and healthcare industry customers through its global network of operations. The company employs approximately 7,750 people worldwide and had revenues exceeding $2.1 billion in 2013. For more information, visit our website at www.bio-rad.com.

This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, "believe," "expect," "may," "will," "intend," "estimate," "continue," or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. For further information regarding the Company's risks and uncertainties, please refer to the "Risk Factors" in the Company's public reports filed with the Securities and Exchange Commission, including the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. The Company cautions you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date hereof. Bio-Rad Laboratories, Inc., disclaims any obligation to update these forward-looking statements.

                                                                            
                         Bio-Rad Laboratories, Inc.                         
                Condensed Consolidated Statements of Income                 
                                                                            
                   (in thousands, except per share data)                    
                                (UNAUDITED)                                 
                                                                            
                                                                            
                                                                            
                                                                            
                               Three Months Ended       Six Months Ended    
                                    June 30,                June 30,        
                             ----------------------  ---------------------- 
                                2014        2013        2014        2013    
                             ----------  ----------  ----------  ---------- 
Net sales                    $  536,832  $  525,321  $1,046,176  $1,024,993 
  Cost of goods sold            239,590     225,220     473,645     453,480 
                             ----------  ----------  ----------  ---------- 
Gross profit                    297,242     300,101     572,531     571,513 
                                                                            
  Selling, general and                                                      
   administrative expense       195,838     195,331     398,113     381,248 
  Research and development                                                  
   expense                       55,717      51,841     108,260     102,184 
                             ----------  ----------  ----------  ---------- 
Income from operations           45,687      52,929      66,158      88,081 
                                                                            
  Interest expense                5,564      11,664       9,421      22,641 
  Foreign currency exchange                                                 
   (gains) losses, net             (286)        865       2,451       2,393 
  Other (income) expense, net    (8,388)     (8,644)     (9,049)    (10,044)
                             ----------  ----------  ----------  ---------- 
Income before income taxes       48,797      49,044      63,335      73,091 
                                                                            
  Provision for income taxes    (17,166)    (14,442)    (25,036)    (18,317)
                             ----------  ----------  ----------  ---------- 
Net income including                                                        
 noncontrolling interests        31,631      34,602      38,299      54,774 
                                                                            
  Net income attributable to                                                
   noncontrolling interests           -           -           -         (21)
                             ----------  ----------  ----------  ---------- 
Net income attributable to                                                  
 Bio-Rad                     $   31,631  $   34,602  $   38,299  $   54,753 
                             ==========  ==========  ==========  ========== 
                                                                            
Basic earnings per share:                                                   
  Net income per basic share                                                
   attributable to Bio-Rad   $     1.10  $     1.21  $     1.33  $     1.92 
                             ==========  ==========  ==========  ========== 
                                                                            
  Weighted average common                                                   
   shares - basic                28,826      28,538      28,809      28,516 
                             ==========  ==========  ==========  ========== 
                                                                            
Diluted earnings per share:                                                 
  Net income per diluted                                                    
   share attributable to Bio-                                               
   Rad                       $     1.09  $     1.20  $     1.32  $     1.90 
                             ==========  ==========  ==========  ========== 
                                                                            
  Weighted average common                                                   
   shares - diluted              29,092      28,868      29,076      28,843 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
                                                                            
                         Bio-Rad Laboratories, Inc.                         
                    Condensed Consolidated Balance Sheets                   
                                                                            
                               (In thousands)                               
                                                                            
                                                                            
                                                                            
                                                                            
                                                    June 30,    December 31,
                                                      2014          2013    
                                                  ------------  ------------
                                                   (UNAUDITED)              
Current assets:                                                             
  Cash and cash equivalents                       $    384,670  $    331,551
  Short-term investments                               262,908       277,369
  Accounts receivable, net                             378,891       422,660
  Inventories, net                                     520,642       501,291
  Other current assets                                 220,383       214,985
                                                  ------------  ------------
    Total current assets                             1,767,494     1,747,856
                                                                            
Property, plant and equipment, net                     440,326       429,355
Goodwill, net                                          535,223       517,770
Purchased intangibles, net                             292,547       266,188
Other assets                                           432,161       427,621
                                                  ------------  ------------
    Total assets                                  $  3,467,751  $  3,388,790
                                                  ============  ============
                                                                            
                                                                            
Current liabilities:                                                        
  Accounts payable                                $    125,461  $    148,510
  Accrued payroll and employee benefits                134,905       130,658
  Notes payable and current maturities of long-                             
   term debt                                             1,725         1,786
  Income taxes payable and deferred tax                                     
   liabilities                                          28,264        20,948
  Other current liabilities                            189,893       185,570
                                                  ------------  ------------
    Total current liabilities                          480,248       487,472
                                                                            
Long-term debt, net of current maturities              435,607       435,615
Other long-term liabilities                            301,952       278,981
                                                  ------------  ------------
    Total liabilities                                1,217,807     1,202,068
                                                                            
                                                  ------------  ------------
    Total stockholders' equity                       2,249,944     2,186,722
                                                  ------------  ------------
    Total liabilities and stockholders' equity    $  3,467,751  $  3,388,790
                                                  ============  ============
                                                                            
                                                                            
                                                                            
                         Bio-Rad Laboratories, Inc.                         
              Condensed Consolidated Statements of Cash Flows               
                                                                            
                               (In thousands)                               
                                (UNAUDITED)                                 
                                                                            
                                                                            
                                                                            
                                                                            
                                                      Six Months Ended      
                                                          June 30,          
                                                     2014          2013     
                                                 ------------  ------------ 
                                                                            
Cash flows from operating activities:                                       
  Cash received from customers                   $  1,087,487  $  1,006,345 
  Cash paid to suppliers and employees               (918,152)     (911,227)
  Interest paid                                       (10,912)      (24,681)
  Income tax payments                                 (17,059)      (42,102)
  Other operating activities                            8,460        15,419 
                                                 ------------  ------------ 
  Net cash provided by operating activities           149,824        43,754 
                                                                            
Cash flows from investing activities:                                       
  Payments for acquisitions and long-term                                   
   investments                                        (42,010)      (65,883)
  Other investing activities                          (59,928)      (68,683)
                                                 ------------  ------------ 
  Net cash used in investing activities              (101,938)     (134,566)
                                                                            
Cash flows from financing activities:                                       
  Payments on long-term borrowings                       (118)         (123)
  Other financing activities                            6,416        (6,013)
                                                 ------------  ------------ 
  Net cash provided by (used in) financing                                  
   activities                                           6,298        (6,136)
                                                                            
Effect of foreign exchange rate changes on cash        (1,065)          559 
                                                 ------------  ------------ 
                                                                            
Net increase (decrease) in cash and cash                                    
 equivalents                                           53,119       (96,389)
Cash and cash equivalents at beginning of period      331,551       463,388 
                                                 ------------  ------------ 
Cash and cash equivalents at end of period       $    384,670  $    366,999 
                                                 ============  ============ 
                                                                            
                                                                            
Reconciliation of net income including                                      
 noncontrolling interests to net cash provided by                           
 operating activities:                                                      
                                                                            
Net income including noncontrolling interests    $     38,299  $     54,774 
Adjustments to reconcile net income including                               
 noncontrolling interests to net cash provided by                           
 operating activities:                                                      
  Depreciation and amortization                        73,007        68,211 
  Changes in working capital                           38,045       (90,568)
  Other                                                   473        11,337 
                                                 ------------  ------------ 
Net cash provided by operating activities        $    149,824  $     43,754 
                                                 ============  ============ 
                                                                            

Investor and Financial Contacts:
Bio-Rad Laboratories, Inc.
Christine Tsingos
Executive Vice President and Chief Financial Officer
Ron Hutton
Vice President, Treasurer
510-724-7000
Email Contact



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